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Question - Curly Manufacturing is estimating overhead of $600,000 for next year that is allocable to its deluxe and basic product lines. At the beginning of the year, they predicted the following activity levels of various potential cost drivers:
Deluxe
Basic
Total
Units produced
15,000
45,000
60,000
Machine hours
9,000
21,000
30,000
Material moves
2,000
4,000
Setups
600
400
1,000
1. How much overhead cost is expected to be allocated to the deluxe product line if machine hours is the chosen cost driver?
2. How much overhead cost is expected to be allocated to the basic product line if setups is the chosen cost driver?
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